Venezuela’s Oil Production Has Collapsed

Venezuela’s oil production held up last month, but appears to be falling off a cliff once again.

Output in Venezuela rebounded a bit in April, following the horrific electricity blackouts that rocked the country the month before. Production rose to 768,000 bpd in April, up a modest 28,000 bpd, ending a long string of monthly losses. The data would appear to be positive for Venezuelan President Nicolas Maduro, who managed to fend off a coup attempt in late April and early May.

However, the uptick in production may only amount to a temporary reprieve, with outside pressure, led by U.S. sanctions, continuing to choke the country.

WNU Editor: No one is buying Venezuelan oil. And with limited storage facilities and no tankers showing up to pick up any oil, production facilities will need to shut down. This is what is going to end the Maduro regime. No oil means no money. And with no money Venezuela’s importance to countries like Russia or Cuba becomes limited to a political one, not an economic one. But the real impact will be in Venezuela itself. The government will no longer be able to pay its important employees and supporters, and if the government cannot support its base it will be only a question of time before their loyalty will shift to the opposition. I give it another year (if not sooner) before that happens.